by PRIYA VASU / Pic by BERNAMA
BANK Rakyat Group recorded a profit before tax and zakat (PBTZ) of RM1.44 billion and a net pro t of RM1.38 billion for the financial year ended Dec 31, 2020 (FY20).
In a statement, the cooperative bank stated the steady performance was achieved via its strong fundamentals and focused on core activities, despite lingering uncertainties from the Covid-19 pandemic and post-moratorium impact.
The FY20 result was backed by robust financing and investment activities with a slight decline in the financing income due to margin compression from the low Overnight Policy Rate.
“Higher provisioning for potential non-performing financing, in line with the industry trend, resulted in the lower PBTZ, compared to previous year’s profit of RM1.83 billion,” the bank said.
Net operating income rose 6.4% to RM3.41 billion helped by the lower funding cost from the effective liability management and strong growth in current and saving accounts at 25.5% to RM8.28 billion from RM6.6 billion previously.
Bank Rakyat managed to sustain a healthy cost-to-income ratio below 40% in 2020, which is lower than industry average from its effective cost management activities.
The group continued to be the most profitable cooperative bank, as well as the second-largest Islamic financial institution in Malaysia.
Its total assets grew 1.8% yearon-year (YoY) or RM1.95 billion to RM111.75 billion in 2020 mainly driven by the growth in financing balance, but normalised by lower treasury assets in line with the effective asset liability management measures throughout the year.
Return on assets remained healthy at 1.3% and on par with the banking industry average.
The growth in net financing balance of 6.9% YoY or RM4.89 billion to RM76.08 billion from a year ago was helped by lower repayments during the six-month blanket moratorium offerings.
The group remained firm in the long-term strategic initiatives in diversifying its portfolios with a strong growth in retail home financing of 11.7% YoY to RM6.89 billion, as well as Ar-Rahnu segment of 12.9% YoY to RM2.2 billion, Bank Rakyat added.
In addition, its commercial segment grew by 21.2% to RM5.8 billion in line with the group’s longterm plan to support its small and medium enterprise segment.
The group’s shareholders fund increased by 6.2% or RM1.22 billion to RM20.95 billion from RM19.73 billion in 2019 arising from the group’s net profit carried forward during the year.
Bank Rakyat announced a 13% dividend with an estimated pay out of RM373.36 million to all its members for 2020.
The bank contributed 2% or RM28.1 million of its PBTZ to the Cooperative Education Trust Fund and 1% or RM14.05 million to the Cooperative Development Provident Fund, it noted in the statement.